Leeds Building Society is launching innovative partnerships and products to break down barriers to home ownership. One such partnership is with Experian, enabling aspiring homeowners to connect to its free Experian Boost service.

Aspiring first time buyers faced challenges in 2023 incomparable to earlier generations. It was one of the hardest years to buy a home since Leeds Building Society’s founding year in 1875 - and no surprise that mortgage lending fell by 23% according to UK Finance, or that the number of first time buyers fell to the lowest levels in a decade.

In the face of tough conditions our Society’s purpose - putting home ownership within reach of more people, generation after generation – drives us to help first time buyers in innovative ways. We concentrated our support on the needs of aspiring homeowners and helped nearly 18,000 first time buyers to get on the housing ladder last year. We’re doing what we can: more than half of our new mortgages went to first time buyers, an increase from one in three in 2022. 

We did this by continuing our market leading position in shared ownership mortgages and by launching innovative partnerships and products designed to help break down barriers which prevent home ownership, such as Home Deposit Saver and by becoming the first UK mortgage provider to partner with Experian and connect to its free Experian Boost service. 

Launched last May, aspiring homeowners can improve their chances of getting on the housing ladder through Experian Boost thanks to extra evidence of their financial history being factored into mortgage checks. 

Since then we’ve been able to offer a mortgage to nearly fifty customers who would not have been able to without Experian Boost

Regular debit payments, such as council tax and subscriptions such as Netflix, contribute to credit scores and can be factored into mortgage applications. This particularly helps younger borrowers, first time buyers, and anyone on lower incomes who face the toughest challenge to prove their ability to repay. Often through no fault of their own, these groups can struggle to build a good credit score because they need to spend most of their earnings on rent and other regular payments. 

Experian Boost uses open banking to link the borrower’s current account payments to their credit score, which is then connected to the Society’s lending systems. Open banking allows consumers (who have given explicit consent) to share their bank transactions conveniently and safely with FCA authorised third parties using APIs – or Application Programme Interfaces – which allow banks and other companies to securely share this data between their organisations. 

Greater adoption of open banking will make it possible for lenders to further innovate and support first-time buyers. Empowering more lenders to develop innovative new lending solutions, quickly and simply using ‘legitimate interest’ capabilities to broaden access to open banking data, would level the playing field for lenders without access to current account data.

Leeds Building Society has led on new and innovative ways to help underserved first time buyers, partnering with Experian and by developing tailored mortgage solutions for those with small deposits who ordinarily would not qualify for a standard mortgage. We are further working to consider how a record of monthly rental payment could also contribute positively to our decisions.

With improved access to the same range of data that larger lenders already benefit through their own customer data, Leeds Building Society and other equivalent lenders would be empowered to make more tailored decisions and support a wider range of underserved groups currently locked out of home ownership.

Find out more: www.leedsbuildingsociety.co.uk/knowledge-base/home-buyers

This article was first published in Society Matters magazine.